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HIV Drugs Patents Legislation

HIV/AIDS, TRIPS and second-line therapy

Since 2005, developing countries that are members of the World Trade Organisation (WTO) (such as India. Thailand and Brazil ) have been required by the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement to issue patents. Obliging developing countries to comply with patent legislation has complicated the provision of HIV treatment. This is because although patents have expired on a number of first-line AIDS drugs (making them available cheaply from generic makers), patents still exist on most new and second-line medicines.

This is problematic as newer antiretroviral drugs are generally less toxic, easier to take and more effective at fighting HIV. They are often needed when a patient has to change their antiretroviral regime due to toxicity or resistance. Drugs used to combat resistance are called second-line drugs and although the number of people in need of second-line drugs is expected to increase, the price of these drugs remain on average six times higher than drugs commonly used for first line regimens. 1

TRIPS has stifled the generic competition that drove the price of first generation antiretrovirals down, causing huge disparities in the price of first- and second-line ARVs. In 2009 the median cost of the most commonly used second-line regime (lamivudine+tenofovir+ritonavir-boosted lopinavir) was US$554 in low-income countries, US$692 in lower-middle-income countries, and US$601 in upper-middle-income countries per person per year. 2 The vastly more expensive second-line drugs mean that, despite very few people taking them, they still account for a large proportion of the overall drug expenditure.

The consequence of TRIPS is that the new, better drugs are only available in countries that have the capacity to cover the high cost. Poor countries are forced to wait until their patent expires or the proprietary prices are forced down. The access to treatment gap between people in wealthy and developing countries has angered many, who feel that TRIPS further exacerbates difficulties in supplying antiretroviral drugs to poor countries and puts the profit margins of the large pharmaceuticals before public health. It is felt that if the capacity to provide generic effective, yet cheap antiretroviral treatment to the developing world exists, then it is immoral not to allow the production of drugs that will save millions of lives.

"We're starting from zero again… by the time generic competition kicks in for the newer drugs, millions of people will have died unnecessarily.” MSF campaign for access to essential medicines 3

In light of these concerns, the WTO proposed two means by which generic versions of drugs under patents may be produced.

“We're starting from zero again…by the time generic competition kicks in for the newer drugs, millions of people will have died unnecessarily.“

MSF campaign for access to essential medicines 4

The first is called ‘voluntary licensing’. A government, an individual, or an organisation can request a voluntary license from a patent holder (usually a large pharmaceutical company) to allow generic drugs to be supplied during a public health emergency, either through imports or by local production. A number of voluntary licenses have been granted to date including a licence granted by Merck for South African generic producer Aspen Pharmacare to produce efavirenz. 5 The drawback of voluntary licenses is that they depend on the goodwill of the patent holder, and can be lengthy to negotiate.

The second option, ‘compulsory licensing’, is discussed below.

Compulsory licensing

Legally, a country can get around TRIPS patent enforcement by issuing a compulsory licence. A compulsory licence is a government licence that enables someone other than the patent holder to copy patented products and processes without fear of prosecution. Governments can issue them if a patent owner abuses their rights by, for example, failing to offer their product on the market, or offering it at a price that is too high for potential buyers to afford. Normally, to copy drugs for this reason, the generic company has to negotiate with the original manufacturer to agree royalties (money paid to the patent holder to make up for the loss of profit exclusivity). However, following the 2001 Doha agreement a country can issue a compulsory licence for a drug that treats a disease causing a severe health emergency in that country without royalties being paid. 6

Although in theory compulsory licensing offers a legal solution to patent protection for HIV treatment, in practice it is difficult to exploit for the following reasons:

Generic manufacturers are limited to producing only the quantities predefined in each compulsory licence. This curbs the large-scale production that is required to deliver drugs cheaply.

It was ruled that licences should be granted ‘predominantly’ to supply the ‘domestic market’, making it difficult for poor countries lacking technological capabilities to access generic drugs manufactured abroad.

This final point was a particular point of contention for those concerned with providing ARVs to the developing world as it was felt that this effectively penalised the world’s poorest countries that were already struggling to roll out HIV treatment.

The World Trade Organization (WTO) therefore issued the so-called ‘paragraph 6 waiver’ which allows members who are unable to produce pharmaceuticals at home and are suffering a serious health crisis to import generics from other nations under compulsory licences (providing exported drugs are not part of a commercial or industrial policy of the exporting country). 7

Despite endorsement by the WTO, because of its complicated

nature, compulsory licensing has been used very little by low- and middle-income countries. In fact, to date Thailand provides an excellent example of why other countries have been reluctant to follow suit.

Thailand has issued a number of compulsory licences for antiretroviral drugs including Merck & Co.’s Sustiva® (efavirenz) in 2006 and Abbott’s Kaletra® (a combination of lopinavir & ritonavir) in 2007. 8 9 Abbott – which is the tenth largest pharmaceutical company in the world - was angered that Thailand had ‘ignor[ed] the patent system’ and retaliated by announcing that it would not be applying for licences to sell seven of its newest products in Thailand (one of which was a new once-a-day heat resistant form of Kaletra® which would have been extremely useful in the hot Thai climate). 10 Thailand has since been repeatedly placed on a US Trade Representative 'priority watch list' of countries seen to be committing intellectual property piracy. 11 12 Although this has been detrimental for Thailand, it has helped to reduce the price of Kaletra by half in many developing countries. 13 In August 2010, the Thai government extended compulsory licensing for Efavirenz and Kaletra until their patents expire (January 2012 for Efavirenz and December 2016 for Kaletra). 14

Brazil issued a compulsory license to produce a lower-cost, generic version of Merck's antiretroviral Efavirenz in 2007. Recognising the repercussions that Brazil may face, President Luiz Inacio Lula da Silva said:

Between our trade and our health, we have chosen to look after our health." 15

Despite the WTO permitting production of certain ARVs under some conditions, there remain other barriers to their manufacture and distribution. In February 2009 a shipment of second-line generic ARV drugs was confiscated by Dutch customs authorities. The 49kg of abacavir sulfate tablets produced by an Indian company, Aurobindo, were bound for a treatment programme in Nigeria. The tablets were later released but the seizure highlighted tensions between the European Union’s rules on intellectual property rights and World Trade Organization rules concerning the production of generic medicines. 16

The way forward

For the moment, most people that need antiretrovirals in the developing world are on first-line therapy. However, as treatment becomes more widespread, people stay on treatment for longer and resistance increases, the high price of second-line drugs is becoming a major issue. Addressing this issue will become increasingly important to ensure the most cost-effective use of available resources and the sustainability of treatment programmes. 17

Some countries, such as Thailand, Brazil and India have found innovative ways of securing cheaper second-line drugs. But the problem is that these options are limited to countries with political clout and financial stability and autonomy. As is all too often the case, it is the poorest countries already struggling to manage their HIV epidemics that are the least likely to benefit from the current system.

Some have suggested that the only way forward is to abolish the TRIPS system for medicines altogether, and replace it with an alternative form of remuneration and reward for innovative research and development. However as this is unlikely, an alternative solution needs to be found.

One initiative created by UNITAID in 2009 is the “ Medicines Patent Pool ". 18 The objective of the pool is to hold licences on various patented medicines, which generic companies can then produce at a lower cost for poor countries. 19 The production of generic versions of antiretrovirals can then be more easily negotiated and therefore faster and more efficient. The first patent holder to license an ARV drug to the patent pool was the National Institutes of Health for the drug darunavir. 20

Then in July 2011, the pharmaceutical giant Gilead agreed to license four separate antiretroviral drugs and one combination drug to the pool. 21 Three of these were 'pipeline products', meaning they are still in clinical development. However, their inclusion in the license agreement means that they will be far more widely available when they come onto the market than they would have been if they had not been included. In response to Gilead's decision, the chair of UNITAID stated. "This is an historic day and a good day for people living with HIV/AIDS in developing countries." 22 Although a promising step, the Medicines Patent Pool will require the voluntary participation of other large pharmaceuticals as well to have sustained impact.

In October 2011, Aurobindo Pharma and MedChem, became the first producers of generic antiretroviral drugs to join the Medecines Patent Pool. Under the new agreement, the pharmaceutical companies are licensed to produce a number of generic antiretroviral drugs, which should lead to these antiretrovirals becoming cheaper and easier to access. 23

In April 2014, ViiV Healthcare signed a licence with the MPP for dolutegravir (DTG) - a low toxicity ARV - for both adults and children over 12 years old. There are two types of the license; the first permits a royalty-free voluntary license for all low-income, and sub-Saharan African countries where the HIV burden is greatest. The second type grants six middle-income countries (Egypt, India. Indonesia, Philippines, Turkmenistan and Vietnam) a flexible tiered pricing license, based on their GDP. The European Medicines Agency (EMA), and the US Food and Drug Administration (FDA) approved Dolutegravir very recently, showing that rapidly licensing new drugs is possible. 24 25

Prices of ARVs have been driven down substantially over the years, allowing millions of people to live with the virus. However, greater effort, cooperation and innovation is needed to achieve universal access to affordable life saving HIV treatment.